Subscribe to Inc. magazine
STRATEGY

Forming a Virtual Company

Advertisement

Have you ever failed to land a prospective client because they thought your company was just too small or that you couldn't serve the scope of their needs? Well, there's a way to add size, depth and strength to your company without adding even one employee -- by forming a "virtual company."

For instance, the other day, I was examining a brochure from a consulting company I was considering using for my business. In the section, "The Team," they listed an impressive group of people, each with top credentials and expertise. Looking closely, however, I realized that only two of these consultants were actually employed by the consulting company. Instead, the two company founders had formed an alliance with a group of experts.

Now, this consulting company wasn't being deceptive. Below the name of each "team member" was clearly printed the name of their own individual businesses. Nevertheless, by listing these experts together as a team, they created a very positive impression. I wouldn't just be hiring two lone consultants; I'd have a full range of top specialists at my disposal.

Creating a "virtual" company -- or a marketing alliance -- enables you to:

  • Do joint marketing: It's less expensive -- and more effective -- to combine marketing lists and create combined marketing materials. You can also reach a larger pool of potential clients.
  • Offer clients a broader range of services: Sure, you may believe that you can serve all of your clients' needs, but the client may not feel the same way. Many clients prefer to hire specialists rather than generalists. By offering clients a team of specialists, you're more likely to get -- and keep -- a client's business.
  • Reduce clients' apprehension: Many clients are reluctant to hire one-person or very small companies. They're fearful that they could be stranded if something happens to the one key person.
  • Present a more impressive image: Together with your alliance partners, you're going to have a longer list of former clients, a broader range of experience, awards, and other references than you would have on your own.

And there's another benefit -- if you choose your alliance partners well, you'll get the chance to work with people you respect, enjoy, and can learn from. That's better than always going it alone.

But one of the biggest barriers to putting together a virtual company is just that -- recognizing that it's not always best to go it alone. You may have to give up some part of a client's business to someone else. Are you willing to get a small piece of a big pie rather than all of a very small pie -- or no pie at all?

Let's say you're a graphic designer who specializes in designing websites. Sure, right now you also do some of the technical programming for your clients, but that's not really your specialty and you're limited in the scope of technical functions you can include in your designs. By coming together in a "virtual company" with a more skilled website programmer, and perhaps adding other website-related companies -- such as companies specializing in hosting, maintenance, or site traffic optimization -- you're far more competitive when making proposals to prospective clients.

Many types of business owners can benefit by forming a virtual company with other small companies or individual consultants and then offering their services in an integrated package. These alliances can range from the relatively formal -- with a combined website and marketing materials -- to the very casual, perhaps together just for a proposal to one client.

Remember, virtual companies are not legal entities. There are no rules -- one member of the alliance can bill the client and then subcontract with the other members, or each individual member can bill separately. The key is to stay flexible so you can meet the client's needs.

When you're looking to put together a virtual company, look for partners that fit your own style of communication and maintain the same level of quality. And, as always, only do business with those you trust and respect.

Remember, you can't be everything to all clients, and you can't do everything yourself. As the old saying goes, "The whole is greater than the sum of its parts."

© Copyright Rhonda Abrams, 2003


Rhonda Abrams is the author of The Successful Business Plan: Secrets & Strategies and is a popular speaker for conventions, workshops and conferences. For her free business tips newsletter, register at www.RhondaOnline.com.

Last updated: Jul 1, 2003




Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Livestream events | Comments
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: